Business Outlook 2026 | Pubs

In this section, we explore the pub market in 2025 and provide predictions for the sector in 2026.

Market Overview

At the midpoint of 2025, we reported that the pub market had remained solid, following the disappointing first Budget under the new Labour government in October 2024, which saw further pressure put upon the sector with an increase in employers’ National Insurance contributions alongside an increase in the National Living Wage and National Minimum Wage, together with the reduction on business rate relief.

As we progressed through the summer, the sector was bolstered by decent weather, benefiting those pubs that enjoy well-invested and attractive external areas. Headline turnover remained positive for many operators, however the challenge for all was converting turnover to profit, with as many as a third of pubs reporting that they were struggling to make a profit. Operators reacted by reducing trading hours, with many pubs now closing in the early part of the week.

There was little to cheer about in the Chancellor’s most recent Autumn Budget so far as pubs are concerned. Whilst the plans to introduce permanently lower multiples on business rates is to be welcomed, it is not as great as had been hoped for and will be offset by increased rating assessments alongside payroll costs through further rises in the National Living and Minimum Wage.

Maintaining wage differentials is likely to get more difficult, reducing margins, so increased menu prices and reducing trading hours may be the answer for some. Operators will also be concerned about the impact of tax increases on consumer confidence and discretionary spend in pubs.

Looking ahead, we expect the market to remain polarised. Pubs that are well-invested, with a strong offering, will remain relevant and resilient, and those which are unable to invest will struggle. We are already seeing the signs of an increase in distress. However, while the mid-market proves more challenging, demand for pubs is strong at the top and bottom ends of the market.

We expect the larger pub companies to accelerate the churning of their estates and reinvest proceeds to ensure that they are well-positioned to compete in a market where the consumer will be more discerning than ever. As customer habits continue to evolve, pubs need to ensure that they go far beyond providing a rudimentary food and drink offer. Consolidation may also enable costs to be spread, and we see the potential for an uptick in M&A activity.

Stephen Owens

Managing Director – Pubs & Restaurants

Key Market Trends

Price Index

Headline trading performance has been steady, with improved revenue, but increased cost pressures have resulted in a fairly flat pricing. Many pub companies who would have traditionally been expected to acquire in 2025 have not acquired new sites this year, instead focusing on running their existing estate amid cost pressures.

Market Sentiment

We anonymously surveyed pub professionals across the country to gather their views on the year ahead.

Market Predictions for 2026

The market will remain polarised, with activity at the bottom and top ends of the market.
We will see increased M&A activity as operators seek consolidation to spread costs or churn their estates.
There may be an increase in distress as cost pressures continue to bite, alongside a potentially more cautious consumer.
Pub companies will to continue expand their managed partnership portfolios from both their managed and tenanted estates as well as through the acquisition of new sites.
Lower interest rates may help tempt buyers seeking decent returns back into the market.

Case Studies

26 Freehold pubs, Scotland

FB Taverns acquired a package of 26 freehold pubs from Iona Pub Partnership, the sister company of the Scotsman Group, in December. The majority of sites were located in and around Glasgow, and all existing tenant partners are to remain in place. The acquisition takes FB Taverns to around 70 sites.

The Lamb Inn, Oxfordshire

The Lamb Inn in Crawley near Witney, Oxfordshire was sold to The Cotswold Hospitality Group, a trio of experienced hospitality entrepreneurs planning to build a pub group in the Cotswolds. The Lamb, previously operated by Sebastian and Lana Snow, generated high levels of interest due to its strong reputation and accounts. The new owners plan to preserve its charm while enhancing the guest experience.

Anchor and Angel, East Anglia

The Anchor Inn, set by the riverside in Nayland, and The Angel Inn, a food-led pub with award-winning rooms at Stoke-by-Nayland, were two freehold pubs sold to East Anglian pub company Chestnut, following their purchase of the Red Lion in East Bergholt earlier in the year. The previous owners had developed the pubs over the last decade, with recent investment making them ideal for Chestnut to enhance the trade. The sales were completed off market in just three months, ready to take advantage of the summer trade.

Eight closed pubs, Yorkshire & Lincolnshire

We sold eight freehold and leasehold sites across Yorkshire and North Lincolnshire, which were closed and vacant. The Plough Inn in Binbrook, Tipsy Terrace in Cleethorpes, The Duke of York Inn in York, The Buccaneer in Brough, The Whitestone Cliffe Inn in Thirsk, The Blacksmiths Arms in Wakefield, Sanctuary in Scarborough, and a former Royal Bank of Scotland in Huddersfield have been purchased by a variety of new operators. Seven of the eight sites have already reopened or have the intention to reopen as hospitality venues.

Date	Business	Purchaser	Details
Mar	Whitbread	Family Dining Pubs Ltd	Whitbread sold a package of ten freehold and leasehold pubs to Papas Group. The group have signed a franchise agreement with JD Wetherspoon and are working through conversions with two sites already trading and further sites due to open in 2026.
Apr	Whitbread	Redmango	Whitbread completed on a package of four sites, which are continuing to operate as trading businesses.
Apr	Everards	Punch	The purchase of four leased and tenanted business which further supports Punch's ambition to grow their estate through quality acquisitions.
May	Oakman Inns	Apollo/The Restaurant Group	Oakman Group sold ten freehold managed pubs to The Restaurant Group which will run the sites alongside its circa 80-strong Brunning & Price business before integrating them into its estate.
July	Frontier Pubs/Pioneer Hospitality	Stonegate	Stonegate concluded the purchase of the remaining stake in Frontier Pubs which has 15 pubs across London. The pubs join the Stonegate Pub Partners, leased and tenanted division.
July	Oakman Inns	Upham Inns	Upham Inns acquired the bulk of the remaining Oakman Inns business after the business went into administration in July.
Aug	Suffolk Country Inns	Chestnut Group	Chestnut Group added two more pubs with rooms in Essex to its growing estate. The company now owns and manages 24 pubs with rooms across the east of England.
Oct	Albion & East	Urban Pubs and Bars	Urban Pubs & Bars completed the acquisition of Albion & East, the Imbiba backed group of leasehold all-day venues across the capital.
Nov	RedCat	Admiral Taverns	RedCat Hospitality, the operator of Coaching Inn Group and RedCat Independent Pubs, has reached an agreement with community pub group Admiral Taverns over the sale of its leased and tenanted pubs division, comprising 21 units.